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Senator Kerry. But millions of dollars flowed through them even when they were not flying?
Mr. Bannister. Certainly.
Senator Kerry. When they were not operating as a bona fide flight company.
Mr. Bannister. Yes, because my father and I would say probably at this time today his dream still is to operate a airlines. So, we always had our license. We have still got our license now. We have always had our license.
Senator Kerry. But the millions of dollars were coming through the company and being paid out to people including the prime minister. Is that correct?
Mr. Bannister. Yes, but most of the money that came out of those airline accounts that involved any political situation, any sensitive political situation, like possibly the prime minister or someone else connected with him, my father would put it into one of his other band accounts in another bank, in a private bank account, and he would --.
Senator Kerry. And was there some entity that was sold back and forth between your father and somebody three or four times?
Mr. Bannister. Well, my father had property in an island called Andrus. It had a hotel on it. It was property that was given - it was property that he bought from Robert Vesco with money that Robert Vesco gave him to buy it, so actually, it was actually a gift. My father sold that about two times to Resorts International. Three or four different times he got money on it from certain politicians in the Bahamas who are no longer politicians. Twice he sold it to European people. I would say approximately about seven times it has been sold. Mr. Crosby and them, you know, bought about three different times.
Senator Kerry. And where did the money go? Do you know? Did you see?
Mr. Bannister. Into the accounts. My father tired all he could to keep this airline going. Every dime he got that he didn't give away he dumped into the airline.
Senator Kerry. Well, there is, I might say, an intriguing pattern, which others have been digging into of many of the business transactions. They are not really within the scope of this committee except insomuch as they show a pattern of the kind of transactions that take place in the Bahamas. This also sheds some light on how drug trafficking takes place, and I think we have gotten an adequate sense of that in the course of this hearing, and since that is the true thrust of these hearings, I am going to leave out a lot of those other details, as intriguing as they are.
Senator McConnell, do you have any other questions at this point, or any comments you want to make?
Senator McConnell. No, I do not, Mr. Chairman. Thank you very much. I think this has been a very helpful hearing. I also appreciate the witnesses being here.
Mr. Bannister. Thank you.
Senator Kerry. I want to thank the witness, both witnesses for coming. I would ask folks in the audience if you would just to sit tight for a moment so the Federal marshals can escort Mr. Bannister from the room before we all depart, and for the record,

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it should show that Mr. Bannister has appeared here under subpoena today.
I thank both witnesses for coming, and all those who cooperated in the effort to have them here.
This hearing is adjourned.
[Thereupon, at 12:15 p.m., the subcommittee was adjourned, to reconvene upon the call of the Chair.]

[page 43]

DRUGS, LAW ENFORCEMENT AND FOREIGN
POLICY: CENTRAL AMERICAN
_________________

WEDNESDAY, JULY 15, 1987

U. S. SENATE,
SUBCOMMITTEE ON TERRORISM, NARCOTICS AND
INTERNATIONAL OPERATIONS
OF THE COMMITTEE ON FOREIGN RELATIONS,
Washington, DC.

The subcommittee met pursuant to notice, at 11:15 a.m., in room SD-419, Dirksen Senate Office Building, Hon. John F. Kerry (chairman of the subcommittee) presiding.
Present: Senators Pell, Kerry, Helms, and McConnell.
Senator Kerry. This hearing will come to order.
My apologies for the delay.
This is a continuing series of hearings regarding allegations that have been made not only about drug trafficking which may or may not have assisted the Contras, but also about broader aspects of drug trafficking as they may or may not have come to affect and impact American foreign policy and, indeed, the internal policies of other countries in ways that have come to affect the interests of the United States.
So, not only are we looking at the question of pursuing those issues which have arisen about whether or not Contras received financing through narcotics trafficking, but we are looking at a much broader series of implications which affect our relationship with a number of countries in Central and Latin America.
This committee is trying to determine whether or not there are any steps which we can take, which may not be appropriate, in the effort to try to fashion policy, which can have an impact on lessening the degree to which narcotics may have become an important political force in the world and an international force in the world.
There is an old saying in trial law that "When you try the Devil, you don't go to heaven for your witnesses." To a certain degree, in trying to prove cases regarding the flow of narcotics and how it may or may not have impacted foreign policy and other issues, we must, by necessity, turn to witnesses who have been involved in narcotics trafficking. All of us on this panel and everyone in the public has to obviously exercise his own judgment about credibility, test that credibility, and make determinations about whether or not they think the witnesses have a motive for telling the truth,

43

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are telling the truth, and to what degree their stories can be corroborated.
By necessity, because these hearings have only so many hours at a time and are spaced with the normal workings of the Senate and of this committee, the Committee of the Whole, the Foreign Relations Committee, we can't put the whole story in front of you in one instant.
So, we are building, really, a mosaic, which must be looked at in the total. We caution folks to make judgments about this witness, other witnesses, and other information which may or may not flow from the committee in the light of that larger mosaic.
I don't want to take more time now.
We are turning to a witness who is here, again, under Federal protection, currently serving time. We will try as hard as we can to ask questions that elicit as well as possible the ability to be able t make judgments about that witness' credibility.
Let me turn to my colleagues to see if they have any opening statements at this point in time.
Jesse.
Senator Helms. No, thank you, John.
Senator Kerry. Mitch.
Senator McConnell. No, Mr. Chairman. I really have nothing to add other than to thank you, once again, for holding these hearings, and we look forward to hearing from the witness about what apparently is a terribly devastating problem. To the extent that this drug trafficking is having a direct impact on America's relationship with countries in this hemisphere, we need to know about it.
We look forward to hearing from Mr. Morales.
Senator Kerry. Would you please stand, Mr. Morales.
Would you raise your right hand, please.
Do you swear to tell the truth, the whole truth, and nothing but the truth, so help you, God?
Mr. Morales. Yes, I do.
Senator Kerry. Would you please be seated again, please.

STATEMENT OF JORGE MORALES, CONVICTED DRUG SMUGGLER, MIAMI, FL; ACCOMPANIED BY SHELDON YAVITZ, ESQ., AND RON B. SCHMIDT, ESQ., MIAMI, FL, COUNSEL TO MR. MORALES

Senator Kerry. Would you state your full name for the record, and if you could pull the microphone right up close to you and speak clearly into it, that would be helpful.
Mr. Morales. OK. George Morales.
Senator Kerry. Where were you born, Mr. Morales?
Mr. Morales. I was born in Colombia.
Senator Kerry. When were you born there? Your date of birth?
Mr. Morales. 1948.
Senator Kerry. And are you now an American citizen?
Mr. Morales. Yes, I am.
Senator Kerry. When did you become an American citizen?
Mr. Morales. Late 1970's or early 1980. Late 1979 or early 1980.
Senator Kerry. What is your Social Security number?
Mr. Morales. It's 261-27-3552.

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Senator Kerry. And your prison number at this point in time?
Mr. Morales. It's 08662-016.
Senator Kerry. Could you repeat that one? Could you pull the microphone a little closer.
Mr. Morales: OK. You said - can you repeat the question again, please?
Senator Kerry. Your prison number.
Mr. Morales. It's 08662-016.
Senator Kerry: Where are you incarcerated?
Mr. Morales. In MCC, Miami.
Senator Kerry. And how long have you been incarcerated?
Mr. Morales. For 13 months.
Senator Kerry. You're currently serving a sentence of what period of time?
Mr. Morales. I'm serving two sentences now, Mr. Chairman.
Senator Kerry. What are the two sentences?
Mr. Morales. The one that I was convicted for, CC and cocaine smuggling, and also the one for the contempt charge.
Senator Kerry. Contempt charge?
Mr. Morales. Yes.
Senator Kerry. Well, we'll come back to the contempt charge later. Your cocaine trafficking conviction is for what period of time? What is your sentence?
Mr. Morales. I was sentenced to 16 years in jail.
Senator Kerry. Sixteen years. Last week - or not last week - last month, were you offered immunity before a Federal grand jury to tell your story?
Mr. Morales. Yes, I was.
Senator Kerry. And at that time, did you tell your story?
Mr. Morales. No, I did not.
Senator Kerry. And you were given a contempt citation at that time?
Mr. Morales. Yes, I was.
Senator Kerry. But you have reserved your willingness to tell that story; is that correct?
Mr. Morales. I was willing to tell the story, not at precisely that moment. I didn't have no notice of appearance, I had none of my notes with me. Even though I was willing to do it, they hold me in contempt.
Senator Kerry. Let me ask this. I'm having a little trouble hearing. I wonder if it's possible to turn the microphone up a little bit. Would you pull the microphone up very close.
Mr. Morales. OK.
Senator Kerry. Could you repeat that.
Mr. Morales. That I was willing to testify, but not at that moment.
Senator Kerry. Not at that time?
Mr. Morales. Yes.
Senator Kerry. Now, in coming here, have you been offered immunity by this committee?
Mr. Morales. No, not whatsoever.
Senator Kerry. Have any promises been made to you in exchange for your testimony by this committee?

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Mr. Morales. Not that I know of it.
Senator Kerry. Have you met, or your attorney - let me just, for the record, would you identify yourself, counsel?
Mr. Yavitz. Yes, thank you. My name is Sheldon Yavitz and my office is in Miami, FL. Seated at my left is Ron Schmidt, my associate.
Senator Kerry. And you are currently representing Mr. Morales?
Mr. Yavitz. That's correct.
Senator Kerry. How long have you been representing him?
Mr. Yavitz. Since March 1987.
Senator Kerry. Have you ever met any of the Senators here on this panel prior to today?
Mr. Morales. No.
Senator Kerry. When was the first communication from anyone on any of our staffs to you?
Mr. Morales. The first time I talked about this matter was with Mr. Jack Blum, the gentleman on the left, on your right side. That was about this year, at the beginning of this year, I believe.
Senator Kerry. Now you understand as we begin this testimony, Mr. Morales, that, in addition to the sentences you are currently serving, that if you don't tell the truth, you could be subject to penalties of perjury?
Mr. Morales. Yes, I do.
Senator Kerry. I'm going to interrupt. Rather than go into several areas of inquiry, Senator Helms has an engagement that he has to be at and has some specific questions he wants to ask. To make certain that he does, rather than begin my introductory inquiry, Senator, what don't I turn this over to you at this point, and then we'll come back.
Senator Helms. Mr. Chairman, that's very kind of you and I appreciate it. I will be as brief as possible. Most of my questions can be answered yes or no. Mr. Morales, to the best of your knowledge and recollection, was Eden Pastora aware of the drug activities of Mr. Cesar and Mr. Chammoro?
Mr. Morales. Not that I know of.
Senator Helms. You don't know that he was aware?
Mr. Morales. I do not know.
Senator Helms. Did you ever discuss drug dealing with Eden Pastora?
Mr. Morales. Never.
Senator Helms. Never. Did you ever launder money in Panama?
Mr. Morales. Yes, I did.
Senator Helms. I would like for you to tell the committee as briefly as may be possible the extent of the money laundering in Panama, and how did you go about it. And were any government officials involved in the money laundering in Panama?
Mr. Morales. I get the money in the briefcase, take a plane, a personal plane, a private plane ---.
Senator Kerry. Can you pull the mike closer again?
Mr. Morales. Yes, let me do it this way - and I fly to Panama.

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I would meet these guys who work for the government, and they will take care of the situation with customs, and immigration people, the authorities, and the airport. That's all.
Senator Helms. Were you given protection or escort?
Mr. Morales. Sometimes. If you require it, they will do it.
Senator Helms. By whom?
Mr. Morales. By the bank.
Senator Helms. By the bank?
Mr. Morales. The bank would make the arrangements, yes.
Senator Helms. The government was never involved in that?
Mr. Morales. I don't know what you mean by "the government". I mean, officials?
Senator Helms. The police.
Mr. Morales. Yes, they are.
Senator Helms. The police were involved?
Mr. Morales. Yes, they were.
Senator Helms. To what extent and how?
Mr. Morales. To the extent to safety, to take care of any problems about getting the money inside the airport and getting the money outside of the airport to the city. They were paid for, if you want to call it that way.
Senator Helms. How did you arrange with the police for this service? With whom did you deal?
Mr. Morales. I take the, like I told you, I take the money in the briefcase, I fly over there, previous phone call has been made, and the official over there will wait for me at the airport, and he will take care of all the situation.
Senator Helms. Excuse me just a moment. [Pause.] Mr. Morales, I'm having difficulty hearing you. I was checking to see if I've gone deaf. This sound system in this room is very poor, and I hope, Mr. Chairman, that you and I can solicit a little bit of help from the Senate in that regard, because I just can't hear. Now, excuse me. Did you identify any specific person with whom you dealt? I couldn't hear.
Mr. Morales. Excuse me one second.
Senator Helms. Sure. [Pause.]
Mr. Morales. Upon advice of my counsel, I shouldn't disclose any name in public now. I will not hesitate to do it in a closed session, if you don't mind.
Senator Kerry. Let me just say with the witness that the one agreement we have made is that in a few cases, because of risk of life and other things, we are going to hear those names, and we're going to take them in executive session. At the end of this, we will take those names in.
Senator Helms. Have you ever traveled to Cuba?
Mr. Morales. Yes, I am - I was - I did, I'm sorry. I did.
Senator Helms. Were you involved in any drug activities or money laundering in Cuba?
Mr. Morales. Yes, I was.

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Senator Helms. Will you describe your involvement?
Mr. Morales. With the drugs or with the money? [Laughter.]
Senator Helms. What was that?
Senator Kerry. With the drugs or with the money.
Senator Helms. Both.
Mr. Morales. I used to fly to this part of Cuba, a city by the name of Cayo Largo. It's an island in the south of Cuba, a little island in the south of Cuba, who belongs to the Cuban Government. I used to take money to this particular island, and they kept the money and will transfer the money in any bank that I wanted the money to be transferred, with the charge of $10,000 - I mean, I'm sorry - 10 percent of the amount of money.
In my drug relations with the Cuban Government, I used to fly over their airspace with a special code allowing my plane to go through, on top of Cuba, to save the time that I would have had to go around Cuba.
Do I explain myself correctly? Do you understand?
Senator Kerry. Did you understand that?
Senator Helms. Fairly well. Did you deal with the police or any other representatives of the government in Cuba in terms of protection and facilitating the laundering of the money?
Mr. Morales. Yes, I did.
Senator Helms. I guess, Mr. Chairman, I ought not to ask for them to be identified in open session. But we will get to that in executive session. Let me go back to Panama. I'm going to ask you the same questions about Panama and about Cuba. Do you have any estimate of how much money you laundered in Panama, totally, over the entire period of your involvement?
Mr. Morales. Millions of dollars.
Senator Helms. Millions of dollars?
Mr. Morales. Yes.
Senator Helms. How about Cuba? The same thing?
Mr. Morales. No, not that much.
Senator Helms. Not that much.
Mr. Morales. No.
Senator Helms. Do you have any estimate? We won't hold you to the precise amount.
Mr. Morales. Probably half a million dollars.
Senator Helms. Half a million dollars?
Mr. Morales. Probably, yes.
Senator Helms. So, obviously you had more involvement in Panama than you did in Cuba.
Mr. Morales. Yes, about money laundering.
Senator Helms. Over a longer period of time in Panama.
Mr. Morales. Let me make myself clear about it. I used to take money to Panama and deposit it in accounts, banks, and later on transfer it to some other accounts in the Bahamas.
Senator Helms. Now I think what you have said and are saying is that Cuba allows for safe haven for drug traffickers for their boats or for their aircraft.

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Mr. Morales. Yes, they do.
Senator Helms. Are you aware of any Cubans growing marijuana or processing such narcotics as cocaine or heroin on the island of Cuba?
Mr. Morales. Some of the planes that are confiscated with drugs are sometimes, to my knowledge, directed to me, I was offered to buy the marijuana.
Senator Helms. How about surrounding islands? The same answer?
Mr. Morales. I don't know. I don't understand your question.
Senator Helms. Surrounding islands, islands surrounding Cuba.
Mr. Morales. That belongs to Cuba?
Senator Helms. Yes.
Mr. Morales. Yes.
Senator Helms. OK. Mr. Chairman, I'm going to stop here because I know that you're going to be asking about the same questions that I would ask, and I thank you for your courtesy. I'll be back as quickly as I can.
Senator Kerry. Thank you, Senator. Mr. Morales, I'd like to go back and begin at the beginning a little and lead up through the process, if we can. I'd like to ask some introductory questions, if I may. When did you first become involved in drug trafficking?
Mr. Morales. Around 197-
Senator Kerry. Again, let me just ask you to try to speak very clearly and slowly. Don't worry about taking time. We want to understand what you're saying.
Mr. Morales. To my best of my knowledge, my recollection, it was around 1978-79.
Senator Kerry. Prior to 1978 or 1979, what were you doing?
Mr. Morales. I used to have a company, construction companies, general contractor company, painting, union companies.
Senator Kerry. Are you married?
Mr. Morales. I'm divorced right now. I am divorced right now.
Senator Kerry. At the time you were married?
Mr. Morales. Yes.
Senator Kerry. Do you have children?
Mr. Morales. I have two children.
Senator Kerry. And in 1978, you were in construction business; is that correct?
Mr. Morales. Yes.
Senator Kerry. At that time, were you also a speedboat racer?
Mr. Morales. I beginning to do my career, if you want to call it that way, about speedboat racing.
Senator Kerry. You took speedboat racing very seriously; didn't you?
Mr. Morales. Yes, I did.
Senator Kerry. And you won an international championship?
Mr. Morales. I won several of them.

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Senator Kerry. And do you also hold a world's record in speedboat racing?
Mr. Morales. I hold about probably six, that I know.
Senator Kerry. Six world records.
Mr. Morales. In the Guinness Book, yes.
Senator Kerry. What are those records?
Mr. Morales. I hold the fastest boat in the kilo run, in open class, That was in 1983. I also hold the record of the most prestigious races in the world, which is the Hunt World Trophy, two races in -
Senator Kerry. What is that trophy for?
Mr. Morales. To be the winner of two races in London, in England, and two races in the United States.
Senator Kerry. Now how in 1978 or 1979 did you first become involved in drug trafficking?
Mr. Morales. Because of my boats, boat driver abilities. Because of my boat driver's abilities, you know.
Senator Kerry. Your boat driver's?
Mr. Morales. Yes.
Senator Kerry. Are you also a pilot?
Mr. Morales. I know how to fly. I don't have no license, no.
Senator Kerry. Were you also in the air cargo and air charter business?
Mr. Morales. Yes, I was.
Senator Kerry. When did you go into that business?
Mr. Morales. In 1980.
Senator Kerry. Can you describe that business to us?
Mr. Morales. I bought the company, the company by the name of Aviation Activities, out of Opalaca Airport.
Senator Kerry. Where is that airport?
Mr. Morales. In Opalaca, FL. I used to have my office in building 415, next door to hangar 1.
Senator Kerry. What kind of aircraft did you have?
Mr. Morales. I have several aircraft. I have cargo aircraft, Lear jets, Piper Aztec, Cessna. I have helicopters.
Senator Kerry. How many helicopters?
Mr. Morales. I had two helicopters.
Senator Kery. Were there several corporations?
Mr. Morales. Yes.
Senator Kerry. What were the names of the corporations?
Mr. Morales. Leasen Activities.
Senator Kerry. Can you spell that?
Mr. Morales. L-e-a-s-e-n Activities. Leasen. That company was in charge of the Lear jets charters.
Senator Kerry. How many Lear jets?
Mr. Morales. Oh, I have many of them. I mean, some of them belonged to the company, some of them did not belong to the company.
Senator Kerry. Were the Lear jets used in the drug trafficking?
Mr. Morales. No.
Senator Kerry. What was the other leasing corporation, or the other corporation?
Mr. Morales. Aviation Activities.

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Senator Kerry. What kind of aircraft did that handle?
Mr. Morales. I handled Piper, Navajo Panther, handled Cessna 402, a 210, Cessna 210.
Senator Kerry. Do you remember the tail numbers of those aircraft?
Mr. Morales. Some of them, yes, I do.
Senator Kerry. Were those aircraft used in drug trafficking?
Mr. Morales. Yes.
Senator Kerry. What were the tail numbers on those aircraft?
Mr. Morales. Noviembre - November, I'm sorry - November 114 Sierra Whiskey. That was a 402.
Senator Kerry. That's a Cessna 402?
Mr. Morales. A 402 Cessna. November 811 Hotel Whiskey. That was a Navajo Panther. November 851 - I forgot the last number - Yankee - that was an Aztec.
Senator Kerry. A Piper Aztec?
Mr. Morales. Piper Aztec. A DC-3, I have about probably six or seven DC-3's.
Senator Kerry. Were each of those aircraft used in drug trafficking?
Mr. Morales. Most of them, yes.
Senator Kerry. And will you be able to make available to this committee the documents regarding those aircraft?
Mr. Morales. Yes, I will.
Senator Kerry. Would the FAA have records of flights in and out of that airport, if they were international flights?
Mr. Morales. Yes, they have.
Senator Kerry. Did you file those flights appropriately?
Mr. Morales. Some of them they did, I did.
Senator Kerry. Even when they were carrying drugs?
Mr. Morales. Even when they carried drugs and guns.
Senator Kerry. We'll get into guns later. Did they also file flight plans in the other countries to which they flew?
Mr. Morales. Some of them, yes.
Senator Kerry. Was that true of Costa Rica?
Mr. Morales. It is true.
Senator Kerry. Was that true of Colombia?
Mr. Morales. They did not fly - yes, they did.
Senator Kerry. Filed a flight plan?
Mr. Morales. Yes.
Senator Kerry. OK. Did you record your tail numbers accurately on those flight plans?
Mr. Morales. Yes.
Senator Kerry. Or did the pilots?
Mr. Morales. Yes, yes.
Senator Kerry. Now who encouraged you to make the switch from smuggling marijuana to smuggling cocaine?
Mr. Morales. The whole process became, in 1984, right after I got indicted, in the CC indictment, the A-48 indictment.
Senator Kerry. Before we get there, between 1978 and 1979 and 1983, you were trafficking drugs.

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Mr. Morales: Marijuana
Senator Kerry: Were you also trafficking cocaine?
Mr. Morales: Only one time.
Senator Kerry: Only one time?
Mr. Morales: Not directly.
I lent a plane
Senator Kerry: And the marijuana you were then trafficking was coming from where?
Mr. Morales: The marijuana I was bringing into the United States belonged to myself, in Colombia.
Senator Kerry: This was your personal transaction?
Mr. Morales: Yes.
Senator Kerry: Where did you bring it in from?
What countries?
Mr. Morales: I brought it to the Bahamas
Senator Kerry: To the Bahamas-
Mr. Morales: Yes.
Senator Kerry [continuing]. Or from the Bahamas?
Mr. Morales. No, no.
From Colombia to the Bahamas.
Senator Kerry. From Colombia to the Bahamas.
Why did you go to the Bahamas?
Mr. Morales. Because it's the best stop place for drug activities.
Senator Kerry. Why is it the best stop place?
Mr. Morales. It is close to south Florida, and you be able to carry out, in and out, any drug activities with no problem whatsoever.
Senator Kerry. Why is there no problem whatsoever in the Bahamas?
Mr. Morales. Because you be able to buy just about everybody in the government in the Bahamas about drug-related situations.
Senator Kerry. Did you personally do that?
Mr. Morales. Many times.
Senator Kerry. You personally paid money?
Mr. Morales. Yes, I did.
Senator Kerry. And you could, in executive session, share with us those names?
Mr. Morales. Yes, I will.
Senator Kerry. Now you have been incarcerated for the last 13 months. During the time you've been incarcerated, have you talked to people who are engaged in narcotics running?
Mr. Morales. Yes, I did.
Senator Kerry. Right up to the present moment?
Mr. Morales. Yes.
Can you-I realize it's hearsay and wouldn't stand up in a court of law, but from respect of just this committee's knowledge, where we operate under different rules, can you share with us whether or not it is your knowledge, based on those conversations, that the drug trafficking still continues through the Bahamas?
Mr. Morales. Well, Senator, I've been incarcerated for the last 13 months, like I told you in the beginning, and through my incarceration, between my incarceration, I have been talking to a lot of people who have just recently been put in jail, most of them because of the situation the Bahamas, being caught in a plane or boat, or any type of situation relating to the Bahamas.
Senator Kerry. And it's your knowledge that the same ability to traffic still continues?
Mr. Morales. Yes.
Senator Kerry. Did they tell you whether it's harder or is it more difficult? Is it reduced?
Mr. Morales. About the same way.
Senator Kerry. The same way.
Mr. Morales. About the same way.
Senator Kerry. How large was your organization? [Pause.]
Mr. Morales. It was very big, Senator. It was very big.
Senator Kerry. Can you give us a sense?
How many people?
Mr. Morales. I would say that we got indicted probably 14, 15 people, and there were 7 that did not get indicted and were about probably-
Senator Kerry. Now wait. You're speaking a little bit fast for me.
Fourteen people were indicted?
Mr. Morales. Fourteen were indicted. There were about seven-
Senator Kerry. With you?
Mr. Morales. Yes-the first time. I'm sorry. Let me back up.
The second time, and there were about 6 or 7 that never did get indicted, and there were about probably maybe 10 or more that were not available for the authorities to get them indicted.
Senator Kerry. How many pilots worked for you?
Mr. Morales. Many, many. I would say probably 20, 20 pilots, at least.
Senator Kerry. Twenty or 30 pilots?
Mr. Morales. At least.
Senator Kerry. Are some of those pilots how in jail?
Mr. Morales. Yes, they are.
Senator Kerry. Did some of those pilots fly these cocaine shipments for you?
Mr. Morales. Yes, they did.
Senator Kerry. OK.
Can you share with us the names of those pilots who are in jail currently?
Mr. Yavitz. Mr. Chairman, he would prefer not to do it publicly. And we would again request as to any names, even if they are in jail, that it be done in a closed session.
Senator Kerry. Well, let me ask this question.
Are you willing to share with us the names? With respect to corroborating this story, as you understand, it's every important for us to be able to follow the chain of linkage here.
Mr. Morales. OK. I can give you the names now.
Senator Kerry. All right.
Mr. Morales. One of them is Tom Hughes.
Senator Kerry. Could you spell that?
Mr. Morales. Thom Hughes-H-u-g-h-e-s.
Senator Kerry. H-u-g-h-e-s?

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Mr. Morales. Tom Hughes. He is incarcerated now in Maxwell Camp. He is incarcerated for the same charges that I'm serving time at the present time. Diego Real.
Senator Kerry. Can you spell that?
Mr. Morales. Diego - D-i-e-g-o. R-e-a-l.
Senator Kerry. Where is he incarcerated?
Mr. Morales. I do not have no idea.
Senator Kerry. All right. He was in the same enterprise as you were?
Mr. Morales. Yes. And Lucas Harmony.
Senator Kerry. Would you spell that again, please?
Mr. Morales. L-u-c-a-s. Last name is Harmony - H-a-r-m-o-n-y.
Mr. Yavitz. We should point out that's an alias.
Mr. Morales. Sorry about that. [Laughter.]
Senator Kerry. Let me come back to that. Are the other names aliases?
Mr. Morales. Gary Betzner. I'm sorry. That was my fault. Gary Betzner -
B-e-t-z-n-e-r.
Senator Kerry. Thank you. Is that the only one that's an alias?
Mr. Morales. No. There's quite a few more. [Laughter.]
Senator Kerry. Now, wait, wait.
Mr. Morales. Oh, no, no. I'm sorry, Senator. Do you mean the -
Senator Kerry. I know there are quite a few more who have aliases.
Mr. Morales. No. I thought -
Senator Kerry. Of the other names you gave me, were those aliases or were those the real names?
Mr. Morales. No, no, no. The real names.
Senator Kerry. Their real names?
Mr. Morales. Yes.
Senator Kerry. Let me do this, because my colleague is also under some pressure. I want to ask you a few questions about one area, and then we'll come back. But I do want the record to go through this detail. I know it's tedious, but it's very important. In 1984, you said your shipments began to change. Is that correct?
Mr. Morales. Yes, they did.
Senator Kerry. Is that the point in time in which you were approached by people you knew to be part of the Contra organization?
Mr. Morales. Yes.
Senator Kerry. Can you describe specifically when that took place and what took place?
Mr. Morales. That was right after my indictment.
Senator Kerry. When you your indictment?
Mr. Morales. March 3, March 3 or March 6, 1984. Right after that, few weeks, may a month, I was introduced by the Contra leaders in south Florida.

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Senator Kerry. Who were you introduced to?
Mr. Morales. I was introduced by Popo Chammoro, Octaviano Cesar, and -
Senator Kerry. Popo Chommoro.
Mr. Morales. Yes.
Senator Kerry. Octaviano Cesar.
Mr. Morales. Yes, and Marcos Aguado.
Senator Kerry. And Marco Aguado.
Mr. Morales. Which they represent themselves as being leaders of the Contras and also represent themselves as CIA agents.
Senator Kerry. Now when you say they "represented themselves," did you know of them at that time?
Mr. Morales. I heard about they being CIA agents. Yes, I did.
Senator Kerry. When you say "their being," who was a CIA agent?
Mr. Morales. Marcos Aguado and Cesar Octaviano.
Senator Kerry. How do you know that?
Mr. Morales. It's being very well known through many people for a long time around Central America and south Florida.
Senator Kerry. You knew that at the time?
Mr. Morales. Yes, I did.
Senator Kerry. Did they have to tell you that for you to know that?
Mr. Morales. Not whatsoever.
Senator Kerry. And what happened at that point in time?
Mr. Morales. I as asked for help, financial help, any type of help that they were looking to have, because they had to be in this problem, they didn't have enough money, whatever. And also for exchange of taking care of my legal problems at the moment.
Senator Kerry. I just want to understand this very clearly. You're saying that they asked you for help?
Mr. Morales. Yes, they did.
Senator Kerry. Were they specific about the kind of help they asked you for?
Mr. Morales. Yes, they did.
Senator Kerry. All right. Who specifically asked you for what help?
Mr. Morales. Octaviano Cesar was the one doing most of the talking in my office.
Senator Kerry. What did he say to you?
Mr. Morales. He said that I was looking for airplanes, money, training, weapons, explosives, any type, any kind of help.
Senator Kerry. Did you agree to help?
Mr. Morales. Yes, I did.
Senator Kerry. What did you agree to do?
Mr. Morales. I agreed to give him some planes, money, and to help him, to help him out.
Senator Kerry. When he asked you for explosives, and guns, and other weapons, did you agree to get those weapons?
Mr. Morales. Yes, I did.
Senator Kerry. Did you know where to get those weapons at that time?
Mr. Morales. Yes, I did.
Senator Kerry. How did you know where to get them?

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Mr. Morales. I used to buy the weapons in south Florida, in a gun shop, before that meeting. It was very obvious that I can buy more guns after I have the meeting with these particular fellows.
Senator Kerry. How many times did you meet with these leaders to discuss your help?
Mr. Morales. Many times, Senator. Many times.
Senator Kerry. In what year?
Mr. Morales. Since 198- the first time that I saw him, not met him, but I saw him, was in 1983, around this time, July or so. And then I was introduced formally to them, and the people, the person who was going to introduce me, told me who they were. And I became to be introduced formally with them in 1984. Consequently to that meeting, I have several, several meetings.
Senator Kerry. Now you agreed to give the Contras a plane?
Mr. Morales. I agreed to give the Contras quite a few planes.
Senator Kerry. How many planes did you give them?
Mr. Morales. The first time I agreed to give them a DC-4, a DC-3, a helicopter, a Piper Navajo.
Senator Kerry. You just gave them? You gave them away?
Mr. Morales. Yes, I did.
Senator Kerry. What was in it for you? Why did you give away these planes?
Mr. Morales. Well, Senator, like I told you before, I was arrested long before that time, and I was facing one of the most critical charges because of my indictment. So, they promised me that they would take care of the legal activities, the legal activities that I was charged for.
Senator Kerry. Who promised you that?
Mr. Morales. Cesar and Popo.
Senator Kerry. He said he could take care of your legal problems?
Mr. Morales. Yes, yes.
Senator Kerry. Specifically?
Mr. Morales. Yes.
Senator Kerry. We he more specific about that?
Mr. Morales. Yes.
Senator Kerry. How?
Mr. Morales. Many times I talked to him and he told me that he had plenty of friends, being him, the CIA, can advise the superiors about my financial support and airplane and training, and, therefore, they will finally, eventually will take care of my problem, which they did. To an extent, they did. As a matter of fact, they did.
Senator Kerry. We'll come back to that in a little while. If you'd make a note on that, we'll come back to that in a while. I want to just run through this so Senator McConnell can have his round.
Mr. Morales. Excuse me one second. [Pause.]
Senator Kerry. Was the plane that you gave the Contras used by them?
Mr. Morales. Yes, it was.
Senator Kerry. And you know that for a fact?
Mr. Morales. For a fact, sir.

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Senator Kerry. At this point in time, did you make some agreement about running guns down to various locations and bringing drugs back?
Mr. Morales. Yes, I did. That was part of the agreement.
Senator Kerry. When you say "that was part", can you be more specific? Precisely how did that discussion some about?
Mr. Morales. I was supposed to give him financial support, also buying guns for them, supplies, safety houses for them, in south Florida, buying equipment, different type of equipment, boats, engines, boots, uniforms, whatever it was they need for them to have.
Senator Kerry. How were you supposed to buy this? Did they give you money?
Mr. Morales. No. I was the one who was going to buy, from my own money.
Senator Kerry. Where was the money coming from?
Mr. Morales. Drugs.
Senator Kerry. Did they know that?
Mr. Morales. Of course they know that.
Senator Kerry. Why do you say "of course they know that"? How do you know they know that?
Mr. Morales. Because we discussed, as a matter of fact, we discussed to bring drugs that did not belong to me. They were their own drugs.
Senator Kerry. Whose drugs?
Mr. Morales. The Contras drugs.
Senator Kerry. How do you know they were Contra drugs?
Mr. Morales. They told me.
Senator Kerry. What?
Mr. Morales. They told me. As a matter of fact -
Senator Kerry. What did they tell you? Did they say here's drugs, these are Contra drugs?
Mr. Morales. No, no, no. They say, there was a few trips that I was supposed to do for them in drugs. I did not ever ask him where the drugs come from other than that they were the drugs.
Senator Kerry. Did you do those trips?
Mr. Morales. Yes, I did.
Senator Kerry. When you say you did, did you personally fly them?
Mr. Morales. No. I instruct my pilot to fly them. I was waiting on the runway for some of them, and I saw the drugs.
Senator Kerry. Now, in 1984, did you personally load weapons into an airplane in Fort Lauderdale?
Mr. Morales. Yes, I did.
Senator Kerry. Did you see those weapons?
Mr. Morales. I bought them.
Senator Kerry. Where did you buy them?
Mr. Morales. I bought them, some of them I bought them in the gun shop in south Miami.
Senator Kerry. What kind of weapons were they?

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Mr. Morales. Machineguns, automatic rifles, high powered rifles, pistols, explosives.
Senator Kerry. Were these fully automatic machineguns?
Mr. Morales. Oh. Yes. They were.
Senator Kerry. Did you buy fully automatic machineguns on the open market in Florida?
Mr. Morales. I did.
Senator Kerry. In what quantity did you buy them?
Mr. Morales. We sent many planes full of weapons down there. I really don't recall specifically the amount of items, but it was very considerable.
Senator Kerry. Did you load these weapons onto the airplane in daytime or nighttime?
Mr. Morales. I did load them in the daytime, 12 noon in the daytime.
Senator Kerry. Right in the full view of people?
Mr. Morales. Yes. Many times.
Senator Kerry. And were you at the airport when the planes came back?
Mr. Morales. Yes, I was.
Senator Kerry. What did you unload from those planes when they came back?
Mr. Morales. I was in the beginning of the runway. The plane lands and unloads the drugs into the end of the runway.
Senator Kerry. How did you know they were drugs?
Mr. Morales. I saw them.
Senator Kerry. What did you do with those drugs?
Mr. Morales. Sell them.
Senator Kerry. What did you do with the money?
Mr. Morales. Give it to the Contras.
Senator Kerry. All right. I'm going to come back to this because there's obviously considerably more detail that needs to be filled in.
Mr. Morales. Let me make myself clear, Senator.
Senator Kerry. Please.
Mr. Morales. I gave them back to the same people because the Contras means a lot to a lot of people. I gave them back to Mr. Octaviano Cesar, who works for, used to work for the CIA, and Mr. Popo Chammoro, and Marcos Aguado.
Senator Kerry. We're going to come back to go after some of the details on this. I'd like to let Senator McConnell have an opportunity here.
Senator McConnell. Thank you, Mr. Chairman. We've heard a lot of allegations in both executive sessions and in public sessions from people who are currently in jail about a variety of different individuals who are not in jail. For example, 3 weeks ago, Mr. Chairman, my staff asked yours to confirm whether or not certain individuals were or were not members of the CIA, if such allegations were to be made in public. We have here today two suggestions, of two individuals, that Mr. Morales, who is currently in jail, say were members of the CIA. I just wonder if counsel has found the answer to that, since we have made that request several weeks ago.

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Senator Kerry. We don't have an answer. We do not have an answer yet.
Senator McConnell. Well, it seems to me elementary, when you know in advance that somebody is going to say in a public meeting that a couple of individuals are in the CIA, that we would be entitled to an answer to that. I would suggest, Mr. Chairman, that we get that answer forthwith. We are all interested in this inquiry. I think it is terribly important. But to the extent that people are going to be accused in public of being this, that, or the other, by convicted felons who are currently doing time, it seems to me we also owe the public an obligation to find out whether or not these allegations are truthful.
Senator Kerry. Let me just say that I don't disagree with the Senator at all. In fact, I agree completely. He is absolutely correct. He is on target. This Senator is somewhat frustrated, however, because for a year and a half, I have been asking these questions. We now have subpoenas out. I have met with members of the CIA. We have sent letters under the signature of Chairman Lugar and at that time Ranking Minority Member Pell to the Justice Department, and we still do not have answers to those inquiries. I think there has been a pattern of slow response here, which is part of what I think we'll get out of this over time. But I will certainly undertake, to the best of my ability, in joint concert with your office, immediately upon the conclusion of this hearing, you and I can both get on the telephone and we can both ask for that secret briefing and see if we can get to the bottom of this.
Senator McConnell. Well, I think we should have done that earlier. As you know, we have tried to pursue this in a bipartisan way and I would like to continue to do that. But we would like, as I have repeated to you in private, when allegations such as this are made, we think we're entitled to hear from the people against whom the allegations are made. There is one individual that is not the subject of this hearing today that we fully expect to be called next week to respond to allegations that were made against him in an earlier executive session, and I assume, counsel, that that's going to happen. Is it not?
Senator Kerry. We are hopeful that it will. We have been trying to serve that individual. He is currently in uniform in the armed services of another country.
Senator McConnell. He has agreed to come at any time. We have been in communication with him. There is no problem. There appears to be a delay in trying to get him up here. He is willing to come next week, and I fully expect him to be called next week.
Senator Kerry. We fully expect him to be here as soon as possible. He was subpoenaed in the large group of subpoenaes that went out last week.
Senator McConnell. He doesn't even need to be subpoenaed. He's happy to come, wants to come, and, as far as I'm concerned, he's going to be here next week. Unless you tell me otherwise.

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Senator Kerry. If he says that he's going to be here, I'm delighted to hear him.
Senator McConnell. We'll be delighted to hear from him. Meanwhile, back in the Bahamas, how frequently did you transit the Bahamas?
Mr. Morales. Every day, Senator.
Senator McConnell. Every day?
Mr. Morales. Yes.
Senator McConnell. Did you rely on airdrops, offloading cargo planes to smaller planes, or did you use boats, or all of those?
Mr. Morales. I used all of them.
Senator McConnell. All of them?
Mr. Morales. Yes.
Senator McConnell. And you were doing it every day?
Mr. Morales. No. I used to fly it to the Bahamas every day.
Senator McConnell. You flew to the Bahamas.
Mr. Morales. I used to also do trips, small trips every day, yes.
Senator McConnell. And how long were you flying over there every day?
Mr. Morales. I recall sometimes we did seven trips a week. I recall once that we did seven trips a week.
Senator McConnell. Yes. But over how long a period of time were you going over there/
Mr. Morales. From 1979-80 to 1983-84-three.
Senator McConnell. How many people were typically involved in those transactions over there in the Bahamas?
Mr. Morales. Unloading the merchandise?
Senator McConnell. Just the number of Bahamians that you would deal with in a typical transaction. How many?
Mr. Morales. Just about everybody in the Bahamas.
Senator McConnell. Just about everybody in the Bahamas?
Mr. Morales. Yes.
Senator McConnell. Put a number on that. How many people are you talking about?
Mr. Morales. Excuse me, Senator. [Pause.] I'm sorry. I must have misinterpreted the question. Can you ask me the question again, please?
Senator McConnell. How many Bahamians would you deal with in a typical transaction to make it work out to your satisfaction?
Mr. Morales. In a single transaction?
Senator McConnell. Yes.
Mr. Morales. Customs, immigration, the police, and the people who were in charge of unloading the merchandise, the people in charge to keep the merchandise safe.
Senator McConnell. And all of these people were bribed, were they not?
Mr. Morales. Every one of them.
Senator McConnell. Were there individual acts of bribery, or could you make a monthly payment? Just how did you handle this?
Mr. Morales. They used to make their salary by trip. I used to pay like, for instance, to the man in charge of the island, he used to take care of the police, immigration, and customs.

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